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Ms. Carvalho and Hon. City Council Members November 18, 2014 Page 2 Steptoe STEPPOE 6 JOHNSON LLP reason, other cities—including Buena Park, Pomona and Fullerton—have rejected similar proposals by AV. Third, the Agreement reveals that AV will control all billboards on City property for 30 years. This lengthy encumbrance of City property is unnecessary and a bad deal for City taxpayers. Indeed, the length of the Agreement's term itself violates Section 1301 of the Santa Ana Charter, which states that franchises granted by the City "shall not exceed twenty-five (25) years." Accordingly, there is no good reason to have such a long term in the contemplated Site Agreements. Fourth, the Agreement impermissibly delegates the City's authority to AV by failing to provide adequate safeguards to prevent abuse of third -parties' free speech rights. Specifically, the Agreement contemplates that AV "will be responsible for the construction, operation and maintenance of the City Property Sign, including the sign operation activities of sales agents engaged by All Vision." See Ag'mt at § 5.2(e). This delegation of authority flies in the face of the RFP, which specifically states that the successful proposer "may not be directly affiliated with any company whose primary business is the construction or operation of outdoor advertising products." Signing the Agreement would allow AV—a Caltrans -licensed sign operator—to stifle competition by designing a Strategic Plan that heavily regulates or prohibits altogether competing billboards on private property. The City has no safeguards in place—much less adequate ones—to prevent this potential misconduct. Kugler v. Yocum, 69 Cal. 2d 371, 381 (1968) (explaining that any delegation of authority must be accompanied by "safeguards adequate to prevent its abuse."). Fifth, the Agreement invites future litigation regarding the constitutionality of the City's regulation of billboards and its potential monopoly over any off-site billboard advertising. According to the Agreement, if the City adopts AV's proposed Strategic Plan, then all new billboards on City property will be constructed by AV and belong to the City. Unless the City changes current law to similarly and liberally allow off-site billboards on private property, the City will have established itself and AV as monopolists over, and censors of, an entire medium of commercial advertising. Simply put, the City cannot decide that off-site commercial signs are permissible on City property and then forbid anyone else from speaking unless they pay the City. If free speech in the form of advertising on billboards is allowed, then all persons (not just the City) must have an opportunity to participate in the dialogue. Finally, the City should not be fooled into believing that AV merely is a consultant that wishes to assist the City with creating a well thought-out, balanced outdoor advertising strategic plan. To the contrary, as noted above, AV is a Caltrans -licensed sign operator that is offering its "consulting" services grads so that it can generate massive revenues in the construction and operation of City -owned signs. Said another way, AV's economic interest presents a clear conflict of interest with respect to its consulting services. The City should unbundle these services so that the outdoor advertising strategic plan is balanced and not infected by a private corporation's economic motive.